The option to borrow money online has made everyone’s lives easier. Today, you don’t have to take a personal day off work to visit your financial provider. Most banks and licensed moneylenders have streamlined online application forms that you can fill in in a few minutes at any time, day or night.
The cost of living is high in Singapore. Here’s the problem:
Some loan sharks use the Internet to attract unsuspecting customers. Contacting the wrong moneylender can prove disastrous – you may lose your funds, or worse, have your identity stolen.
1. Check the Financial Institution and their Website
Checking your licensed moneylender and their website is the surest way to borrow money safely, even online.
Here’s what to double-check:
- Ensure the connection is secure. A website that starts with “https” is safer than a website starting with “http.”
- Verify the name. Let’s say you know the name of a legit moneylender or bank in Singapore. A loan shark may create a duplicate website with that moneylender’s name. Red flags include:
- That missing “s” in “https”
- Poor English
- The option to pay a few for a faster loan or to get more money
Remember that licensed moneylenders aren’t legally allowed to ask for a fee before approving your loan. They can ask for a maximum of 10% admin fee, but only after disbursing the cash in your account.
The other fees that a licensed moneylender can demand are:
- A maximum of 4%/month interest from your outstanding balance (not the entire amount)
- A maximum of 4%/month late interest from the instalment you’re late with
- A maximum of $60 late payment penalty fee
- Check MinLaw’s list of licensed moneylenders. All licensed moneylenders in Singapore are registered in this list created by MinLaw. Check all loan agencies you find online on this list to ensure they’re not undercover loan sharks.
- Check their address. MinLaw requires all licensed moneylenders to have a physical address of their headquarters to conduct face-to-face verification. So, firstly, the moneylenders on your shortlist have these addresses. Secondly, make sure an agent establishes a formal interview with you before actually approving your loan.
Warning: You can apply to borrow money online in Singapore, but a licensed moneylender will never disburse those funds online without prior verification.
- Check their ads. If this moneylender advertises their business on social media or sends you messages, they’re iffy. MinLaw directly prohibits moneylenders from advertising, except for:
- Business directories
- Consumer directories
- Their websites
Warning: Get out as fast as you can if you find online ads for loans that send you to specific websites. Online loan ads are illegal! You can also report these websites to the Registry of Moneylenders or the Ah Long hotline at 1800-924-5664.
2. Research Various Alternatives
Even if filling in and submitting your application takes minutes, that doesn’t mean the whole process should. It’s not enough to Google “borrow money online,” click on the first link that pops up, and then actually get your loan from that provider.
Here’s how you should proceed:
- Open a loan provider’s website.
- Check their eligibility conditions (age, income limit, credit rating, customer support options).
- If you fit these conditions, analyse what they can offer you regarding interest rate, tenure, installments, late payment charges, etc.
Once you’ve shortlisted a few options, google reviews on them.
Pro tip: Companies, including licensed moneylenders and banks in Singapore, will highlight positive reviews on their websites. So, search for other customers’ opinions on dedicated forums, Reddit Singapore, or social media.
3. Choose the Right Loan
Not all loans are created equal, and you should find the right one for your needs even if you borrow money online. Otherwise:
Your application can be rejected, in which case your credit rating decreases.
You obtain a less convenient loan from all points of view (sum, interest, installment, and tenure) because it’s not explicitly crafted for your needs.
Some loan types you can consider are:
- Renovation loans: These are secured loans up to $30,000. They have lower interest rates than personal loans.
- Personal loans: These versatile loan packages allow you to borrow up to six times your monthly income. They’re not secured, and you don’t have to explain what you’re using the money for to the loan provider.
- Emergency loans: These urgent loans allow you quick access to funds when going through an emergency. However, you can borrow less money and on shorter terms.
- Car loans: These loans are specifically designed to help you finance your car purchase. Usually, they extend on seven years and get you 60-70% of your car’s value, depending on its age.
- Debt consolidation loans: These plans help you deal with outstanding debt that proves overwhelming. As you amass several loans into one, you can prolong its tenure and lower the instalment value. As such, your new payments will be affordable and, thus, easier to repay. If you have sizeable preexisting debt, you have fewer chances to obtain a personal loan to cover it.
Speak with us at Direct Financial
Direct Financial can help you with all these loans and more.
Direct Financial is an international loan comparison site providing users with quotes from our pool of financial institutions. We are a third-party platform that seeks to offer the best deals. We believe that loan applications should be transparent and scam-free.
We offer you interest rates as low as 1% and convenient offers within 15 minutes. If you’re unsure, try our personal loan calculator here.
If you’re looking for other loans such as renovation loans, click here.